You
do not have to understand all the intricacies of economics, the machinations, and
the manipulation of statistics, the market speculation and derivatives to
realize that, if you were to run your own household on a constant deficit that
is quadrupling in four years, you are in terrible trouble and are going bankrupt.
Our
Gross Domestic Product (GDP) is approximately $15.5 trillion but we spend $6.4
trillion at the federal, state, and local levels, making our gross debt to GDP
ratio almost 106 percent. We are not Greece, Spain, or Portugal but we are on
our way. I use the word “approximately”
because these figures change constantly. (http://www.usdebtclock.org/)
I
realize that, unlike Greece, Spain, Italy, or Portugal, we can print or create
our own currency out of thin air since we are still in control of our monetary
policy via the Federal Reserve System while the Mediterranean countries must
depend on the monetary policy of the EU, coming from Brussels.
The
U.S. total debt is almost $58 trillion, personal debt is $16 trillion, mortgage
debt is $13 trillion, student loans $932 billion and credit card debt $846
billion. The U.S. debt on interest alone is $4 trillion.
I
realize that the student loans have been nationalized and President Obama has
plans in place to forgive this debt in exchange for service in poor areas,
after 5 years of minimum payment, or by an executive order. However, the overall
taxpayers would be responsible to pay any forgiven student debt. How would the
students and their parents feel when they paid off college debt without any
help from Uncle Sam? Where is, as the liberals like to say, the “social justice?”
There
is a level of debt that has been relatively constant and is a hot potato for politicians
who want to be re-elected – unfunded liabilities. An unfunded liability is an
expenditure that will occur in the future for which there are currently no
reserves set aside or in a lock box – the money must be spent as it comes in as
revenue. Revenue of course, cycles with taxation levels, booms and recessions
in the economy, and the level of spending that the federal government is
engaging in. The Social Security liability is almost $16 trillion, the
prescription drug liability is $21 trillion and the Medicare liability is $ 84
trillion – a total of $121 trillion U.S. unfunded liabilities.
A
very important question should be asked by any thinking American, can we afford
the huge, not yet fully known cost of the unfortunately named the Affordable
Care Act (a.k.a. Obamacare) on top of these unfunded liabilities? Is the free
market not the best alternative if we make needed changes to private plans such
as portability across state lines, elimination of certain pre-existing
conditions, and tort reform? Do we have the money to grow the federal government’s
already out of control spending and to satisfy the ever increasing demand for
entitlements from the winning electorate?
The
Federal Reserve monetary base is approximately $2.7 trillion. The M2 money
supply is $10.4 trillion (cash, savings, and small time deposits such as CDs).
The Treasury securities (T-bonds, T-bills, and T-notes) add up to $1.2 trillion.
The most bothersome part of the Federal Reserve Monetary Base is the currency
and credit derivatives at a whopping $632 trillion. The most common types of
derivatives are: forwards, futures, options, and swaps in underlying assets
such as commodities, stocks, bonds, interest rates, and currencies. Since it is
highly speculative, it is highly volatile as well, as witnessed by the housing
crash based on investment in bundled mortgages of good and insolvent mortgages.
Uninformed
liberals viciously attack and slander the credibility of people like me who
report that our national debt is the number one threat to our national
security. Would they attack the one page
ad (page A13) and its signatories as it appeared in the Washington Post on
December 5, 2012, “Addressing Our Debt is a National Security Imperative.”
The
message from the newly formed Coalition for Fiscal and National Security (www.FiscalAndNationalSecurity.org),
sponsored by the Peter G. Peterson Foundation, asks that the fiscal cliff
resolution by the end of the year should contain:
-
Stabilization
of the debt as a share of the economy on a “downward path for the longer term” because
our global leadership is threatened if we accrue national debt faster than we
grow our economy
-
Substantial
deficit reduction over the next ten years with “parameters for longer-term
fiscal reform, including future levels of debt as a share of the economy, and a
date by which the budget must balance”
-
Tax
reforms to raise more revenues through “eliminating deductions, increasing
rates and/or more fundamental changes to our tax code”
-
“Changes
to entitlements on a sustainable long-term path”
-
“Changes
to defense and other discretionary spending, while protecting the most
vulnerable”
-
“Congress
and the President should agree on an expedited process to enact legislation
reflecting this framework in 2013, in the truest form of patriotism – putting our
country first”
I
am not privy to defense strategy but I see the rising military threat around the
world and the anti-American sentiment coupled with terrorist attacks. I believe in the Roman strategy of “Si vis
pacem, para bellum,” “If you want peace, prepare for war.”
I
am skeptical of the Coalition’s last statement, “In our judgment, advances in
technological capabilities and the changing nature of threats make it possible,
if properly done, to spend less on a more intelligent, efficient and
contemporary defense strategy that maintains our military superiority and
national security.” Somehow, getting rid of a substantial amount of Marines and
soldiers, mothballing naval resources, and cutting nuclear arsenal when others
around the world are building more, do not seem like good ideas. I could be
wrong.
The
signatories to this coalition are former government officials who have served
during eight Presidential administrations, Democratic and Republican, and “strongly believe that our long-term debt is
the single greatest threat to our national security”:
-
Admiral
Michael G. Mullen, Coalition Chairman and former Chairman of the Joint Chiefs
of Staff
-
Samuel
R. Berger, former National Security Advisor
-
Sam
Nunn, former Chairman of the Senate Committee on Armed Services
-
Ike
Skelton, former Chairman of the House Committee on Armed Services
-
Madeleine
K. Albright, former Secretary of State
-
Harold
Brown, former Secretary of Defense
-
Robert
M. Gates, former Secretary of Defense
-
Paul
O’Neill, former Secretary of the Treasury
-
Paul
Volcker, former Chairman of the Federal Reserve
-
James
A. Baker, III, former Secretary of State and the Treasury
-
Zbigniew
Brzezinski, former National Security Advisor
-
Henry
A. Kissinger, former Secretary of State and National Security Advisor
-
George
P. Shultz, former Secretary of State and National Security Advisor
-
John
Warner, former Chairman of the Senate Committee on Armed Services
What
will liberals say who love entitlements and are unwilling to give up an inch of
their cradle to grave mentality? They
believe that taking care of their every need is a birthright. They should not
have to care for themselves as self-reliant Americans have done for generations.
They are the Entitled Generation.
The
problem is that the Entitled Generation is running the country into the ground.
As Dr. Thomas Sowell so eloquently stated, “I have never understood why it is ‘greed’
to want to keep the money you’ve earned, but not greed to want to take somebody
else’s money.” I would call it theft and enslavement of the producers.
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